Newsletter of Danny Merkel - Issue #154

Market Review:

Another all-time-high was racked up for QQQ this week and bulls remain in control. Under the hood, however, the engine is firing on fewer and fewer cylinders.

The new high in QQQ is coinciding with an increasing number of stocks losing ground. For example, at the start of the year, close to 75% of Nasdaq components were above their 50 day-moving average. Today, that number has dropped to just 56%.

With nearly half of the index components trading below their 50dmas, this means that the index is being supported by just a couple of superstars, namely NVDA and MSFT.

Outside the influence of these titans, the world of small-caps continues to look dismal.

The Russell 2000 initially was looking promising at the start of the year with a potential breakout; however that strength faded quickly (red arrow) and the dreaded trading-range marches on.